Can You Take Possession of Precious Metals in an IRA?

Individual Retirement Accounts (IRA) offer investors the ability to invest in various assets, including gold.

The IRS only permits certain gold bars and coins into an IRA account, provided they meet purity standards.

But what if you wish to own and hold on to the gold that’s sitting in a vault somewhere?

Custodians

Custodians must manage physical precious metals held within an IRA account. Their duties include purchasing them from dealers and arranging transfer to an eligible depository, while also providing regular statements outlining current account holdings and market values.

An ideal IRA custodian should possess an established track record and excellent customer service standards, in addition to having all necessary insurance, registrations and licenses in order to operate as an IRA custodian.

Investors looking to add gold and other precious metals to their retirement plans should seek assistance from a Precious Metals Specialist who can advise them on which self-directed IRA (Traditional, Roth, SEP or SIMPLE), dealers to work with and specific items they should buy. They may even connect them with a custodian that makes the process seamless; later investors can select depositories approved by IRS before selecting where their investments will be stored.

Taxes

IRS rules regarding IRAs mandate that precious metal IRAs store their assets at an approved depository, otherwise any time one of their custodians takes physical possession of an item it would be considered a distribution and taxed accordingly.

Some investors opt for precious metal exchange-traded funds (ETFs) that track specific precious metal prices instead of purchasing individual coins or bars; however, ETFs don’t make an ideal option for IRAs as they do not contain tangible assets that you can hold in your hand.

Self-directed IRAs provide greater control over what and how you buy, as they give more choices and options when selecting dealers to sell precious metals that meet IRS purity standards. Dealers may help find suitable precious metal investments. You will pay annual storage and insurance fees on these precious metals but it could be tax deductible!

Rollovers

Precious metals offer many benefits to IRA owners as a diversification tool in retirement portfolios, including currency translation globally and protecting savings against inflation. However, it’s essential that investors understand federal income tax issues associated with an IRA that invests in precious metals.

IRS rules permit individual retirement accounts (IRAs) to invest in certain forms of gold and other precious metals, such as coins or bullion that meet purity standards. Investors should work with a dealer who can assist them in selecting products eligible for investment into an IRA that meet both their personal needs and budget constraints.

A precious metals IRA can be held in either a Traditional, SEP, or Roth account and may even be transferred over from another IRA without incurring penalties from the IRS. Physical distributions made prior to reaching age 59 1/2 will incur taxes as well as an early withdrawal penalty of 10%.

Withdrawals

Some investors use precious metals IRAs to diversify their retirement portfolios. Dodson noted that these IRAs allow investments in gold, silver and platinum bullion coins or bars that meet IRS purity rules – although investors should be wary about purchasing directly from dealers for storage at home unless it’s government-minted such as American Eagle coins – as this may not qualify as eligible investment options.

Investors must select a custodian to oversee their IRA and ensure it complies with IRS regulations on precious metals, select an appropriate bullion bullion type for purchase and decide how they’ll store it before withdrawing them when ready for retirement, either receiving cash payments or taking an in-kind distribution of physical metals themselves – withdrawals made before age 59 1/2 may incur a 10-percent penalty, but IRA owners can bypass it by withdrawing through an approved depository.


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